Minors and immovable property

While the process for transferring ownership of immovable property remains largely the same in cases where one of the parties to the transfer is a minor, the minor’s contractual capacity must be carefully considered.

The ins and outs of subject to bond approval clauses

In the case of a minor entering into an agreement for the sale of land and signing the transfer documents, there are a number of additional requirements that must be met.

Capacity to contract

First and foremost, a minor’s capacity to contract is governed by the common law as well as legislation. Minors are divided into 2 categories based on their age, namely minors under 7 years and minors between the age of 7 and 18 years.

Minors under 7 have no contractual capacity, meaning he or she cannot enter into a legally binding contract alone. Both parents or the legal guardian must sign a contract for the sale of land on his or her behalf. Minors between 7 and 18 have limited contractual capacity, and must be assisted by both parents or legal guardian when buying of selling land.

The parents or legal guardian may also act alone in this instance, subject to Section 80 of the Administration of Estates Act 66 of 1965 which stipulates that “no natural guardian shall alienate or mortgage any immovable property belonging to his/her minor child, unless so authorised thereto by the Court (value exceeding R 250 000.00) or by the Master (value not exceeding R 250 000.00)”.

Section 18 of the Children’s Act 38 of 2005 is also relevant in this instance by providing the following:

“A parent or other person who acts as guardian of a child must:

  • Administer and safeguard the child’s property and property interests;
  • Consent to the alienation or encumbrance of any immovable property of the child…”  

It can therefore be concluded that in the case of a minor being a party to the sale of land, the following will be necessary:

  • Assistance by the parents or legal guardians
  • Consent by the Master or the Court
  • Consent by the parent or legal guardian where the minors immoveable property is sold or bonded (where the minor is duly assisted by the guardian in the power of attorney, this additional consent is not required.)

Donations

The above will also be applicable in the case of a property being donated to a minor. However, due to donations tax (payable by the donor) being high relative to other taxes related to transfers, donations of land is seldom used as a form of transfer.   

Inheritance

When a minor inherits property, it is best practice to create a testamentary trust in favour of the minor, stating that the property will devolve upon the minor at a later age for example when he or she turns 25. The title deed of the property will then be endorsed to this effect.

In the absence of such a trust, the property will be held by the guardian’s fund at the Master of the High Court’s office until the minor turns 18 and the minor will only then be entitled to take transfer.

Follow Snymans on Facebook for more legal information, tips and news about property.

Recommended for you

Property Blog Articles | Advice | Contractual Matters | Market News
Contractual Matters

Buying and selling property – the implications for married foreign nationals[post_view before=""]

In a recent article, we looked at the question of whether foreign nationals are permitted to own property in South Africa. A related question is what happens when a foreign national, who has entered into a marriage outside of South Africa, wishes to buy or sell property. Let’s take a look.

Read More
Property Blog Articles | Advice | Contractual Matters | Market News
Contractual Matters

Foreign property ownership in South Africa[post_view before=""]

Can foreign nationals own property in South Africa? The short answer is yes. But before we explore this topic in any detail, let’s first define what we mean by foreign national – someone who is a non-resident, meaning that they are neither ordinarily resident nor meet the requirements of the physical presence test.

Read More
My name has changed - what happens to my property’s title deed?
Contractual Matters

Power of Attorney: Can it lapse?[post_view before=""]

A power of attorney is a useful tool that can be used in many situations. For example, an elderly parent who, due to their age, finds it difficult to attend to their affairs may decide to grant power of attorney to their adult child.

Read More
Property Blog Articles | Advice | Contractual Matters | Market News
Contractual Matters

Why identifying the ultimate beneficial owner matters[post_view before=""]

In the past, detecting funds from unlawful activities as they entered the financial system was relatively straightforward. However, with the dishonest among us increasingly making use of juristic or corporate entities to hide their true identities and introduce illicit proceeds into the system, it’s becoming more and more difficult for the relevant authorities to identify these funds. And it’s not only South African officials who find themselves in this position – the challenge cuts across international borders.

Read More
Minors and immovable property
Contractual Matters

How does divorce affect transfers in the case of joint ownership?[post_view before=""]

The end of a marriage can result in several administrative challenges, not least of which is tackling the joint ownership of immovable property. And while divorce can be a traumatic and emotional experience, with the proper legal advice, the transfer of ownership doesn’t need to be.

Read More

Need more Snymans content?

Sign up for our monthly newsletter.

Minors and immovable property

While the process for transferring ownership of immovable property remains largely the same in cases where one of the parties to the transfer is a minor, the minor’s contractual capacity must be carefully considered.

The ins and outs of subject to bond approval clauses

In the case of a minor entering into an agreement for the sale of land and signing the transfer documents, there are a number of additional requirements that must be met.

Capacity to contract

First and foremost, a minor’s capacity to contract is governed by the common law as well as legislation. Minors are divided into 2 categories based on their age, namely minors under 7 years and minors between the age of 7 and 18 years.

Minors under 7 have no contractual capacity, meaning he or she cannot enter into a legally binding contract alone. Both parents or the legal guardian must sign a contract for the sale of land on his or her behalf. Minors between 7 and 18 have limited contractual capacity, and must be assisted by both parents or legal guardian when buying of selling land.

The parents or legal guardian may also act alone in this instance, subject to Section 80 of the Administration of Estates Act 66 of 1965 which stipulates that “no natural guardian shall alienate or mortgage any immovable property belonging to his/her minor child, unless so authorised thereto by the Court (value exceeding R 250 000.00) or by the Master (value not exceeding R 250 000.00)”.

Section 18 of the Children’s Act 38 of 2005 is also relevant in this instance by providing the following:

“A parent or other person who acts as guardian of a child must:

  • Administer and safeguard the child’s property and property interests;
  • Consent to the alienation or encumbrance of any immovable property of the child…”  

It can therefore be concluded that in the case of a minor being a party to the sale of land, the following will be necessary:

  • Assistance by the parents or legal guardians
  • Consent by the Master or the Court
  • Consent by the parent or legal guardian where the minors immoveable property is sold or bonded (where the minor is duly assisted by the guardian in the power of attorney, this additional consent is not required.)

Donations

The above will also be applicable in the case of a property being donated to a minor. However, due to donations tax (payable by the donor) being high relative to other taxes related to transfers, donations of land is seldom used as a form of transfer.   

Inheritance

When a minor inherits property, it is best practice to create a testamentary trust in favour of the minor, stating that the property will devolve upon the minor at a later age for example when he or she turns 25. The title deed of the property will then be endorsed to this effect.

In the absence of such a trust, the property will be held by the guardian’s fund at the Master of the High Court’s office until the minor turns 18 and the minor will only then be entitled to take transfer.

Follow Snymans on Facebook for more legal information, tips and news about property.